Year-over-year home sales across the Washington region were down in November, bringing to 24 straight months’ worth of declines that began occurring as interest rates started to spike in early 2021.
The 3,328 homes that went to closing across the region in November represented a decline of 9.3 percent from a year before, according to new figures from Bright MLS, the region’s multiple-listing service.
“Higher mortgage rates and low inventory continue to be constraints,” said Lisa Sturtevant, chief economist for the organization, who nonetheless pointed to hopeful signs that the sales would perk up as 2023 giving way to 2024.
Figures represent transactions in the District of Columbia; Arlington, Fairfax and Loudoun counties and the cities of Alexandria, Fairfax and Falls Church in Virginia; and Montgomery, Prince George’s and Frederick counties in Maryland.
On the cup-half-full front, the rate of year-over-year decline in November was the lowest since the beginning of 2021. On the cup-half-empty side, that’s largely because sales at the end of 2022 already were sluggish, so even a small decline now represents an ongoing drop from the market peaks from late 2020 into early 2021.
COVID’s arrival in March 2020 sent the region’s real-estate market into a three-month tailspin, with year-over-year sales sagging considerably. But then the situation boomeranged, with a full 12 months of year-over-year increases. There then were five months of relative flatness, followed by the current 24 months of declines.
Prices, in general, have kept on advancing. Since COVID hit, year-over-year median sales prices in the region have grown 39 months and declined only four – those coming in December 2022 and March through May 2023.
In November, the median sales price of $570,000 across the region represented an increase of 5.8 percent from a year before. And in a somewhat atypical result, median sales prices rose from October to November, albeit just a fraction of a percent. Typically, prices cool with the temperatures before warming again in springtime.
While the Northern Virginia Association of Realtors (NVAR) is projecting continued slow sales for 2024, there are a couple of variables:
• Interest rates appear to have peaked and are coming down, although that could change in a heartbeat.
• Many homeowners who have been unwilling to part with super-low-interest-rate mortgages ultimately will either have to, or choose to, put their homes on the market.
“I am optimistic that as mortgage rates fall, we will see more people ready to sell their homes, and more buyers ready to pick up their home searches where they left them,” said Casey Menish of Pearson Smith Realty, a member of the NVAR board of directors.
